I have heard this question a lot: "How Much Should I Charge for An Oil Change?"
There are two ways to answer that question. You have to consider two things. First whatever you do charge you need to be making $100 an hour. Second, what is the price of an oil change at Jiffy Lube.
I will attack the second consideration because I have already talked about the first one at length. I would like to say, if I have not already, that I like Jiffy Lube model. I have spoken to the owner of the Jiffy Lubes were I live, have been in them, and I love their system. They have created a great assembly line type system for oil changes. I have learned a lot by watching and copying their model and applying that to a mobile operation. Obviously it works. I figure they have to know what they are doing. If they didn't than they would not be in every city and on every block.
So what does what I just said have to do about pricing? Well, what I just said about watching Jiffy Lube applies to a lot of facets in this business but setting your prices for a typical oil change is one of them. Think about it! They know the market better than anyone. Jiffy Lube will always charge what they market will bear. They are never too low or too high. Where I live they charge $54.99 for a regular oil change. They charge $57.99 for an AWD or 4WD vehicle. I know many of you gasp when you hear that but I promise you customers were lined up, some bays 5 deep, yesterday. What does that tell me? Why should I be any lower? If anything my price for an oil change should be at least $56.99 because I am bringing the service to them!
Where you live I can promise you that Jiffy Lube will have already researched the market for you. Set your prices right where they are. Not their seasonal or at times special discounted price but there standard prices. They do the $19.99 oil changes too but only on certain days and for certain times of the day for most places.
No matter where you live I can guarantee that your prices should not be less than $35.00 for a basic oil change. If your market cannot or will not bear at least that I would suggest buying a Taco Bell or KFC franchise. I rarely see a place those two stores cannot make money in.
Do not worry about Wal Mart's prices. They cater to the people who would not use your service anyway. They do terrible service and make the customers wait for a long time on purpose. They want people to shop more. Thats the only reason they have it.
So you have the answer now. For your average price of an oil change your prices needs to be A) at Jiffy Lube's rate or higher and B) high enough where 4-5 vehicles can net your $100 per hour. Its that simple.
Wednesday, July 1, 2009
Tuesday, June 9, 2009
Mobile Oil Change Profits Going Up
Mobile Oil Change Business Advice. You want to know it so here it is.......
Today I just picked up a fleet that has six Isuzu Box Trucks. I wish they were all diesel as only one of them is but I guess I can live with that. I set it up to do on a Tuesday because that's when they are not being driven and on a three month interval. I put them into the computer and just go out and do them. I do not even call. The only way they know we were out there is if they see us or the drivers notice a brand new window sticker in the window.
Good mobile oil change business advice is hard to find these days. Its not really a new industry any longer. You have had mobile oil change operators around for the last fifteen years. Most heavy construction equipment dealerships have a mobile service they offer although its very expensive. I have found that the reason why people think mobile oil changes is some "new" service for 2009 is because most operators only last a year. This industry has a 90% failure rate I would say. It may be more.
I was actually talking to one of the managers at one of the busiest quick lubes in town and, wow, did I have an interesting conversation with him. He re-affirmed several things I already knew. We talked for thirty minutes and let me outline some things we talked about that will give you insight in the oil change business. I used to think that we were different but I have come to find out that mobile oil change businesses and fixed oil change businesses are all in the same boat.
Here are two of the many things we talked about.
Add Ons
This is the key to your profits. This is what you take home ladies and gentleman. Oil change pay for the van, building, phone line, insurance, and all the other set overhead you may have but add ons pay YOU.
Without them you will be flailing in the wind. I used to think that we did not need add-ons. We did not have the overhead as Jiffy Lube so we only pushed them if we had to. Nonsense!
You need to push air filters, wiper blades, coolant flushes, radiators flushes, injectors cleaners, and anything else you can think off to get each ticket invoice as high as you can while at the same time being ethical. I firmly believe in God and that you should not sell anything that is false or the customer truly needs. But if the vehicle calls for it or they need it you need to be able to sell it. That's business. If you are doing individuals you need to be able to average one additional service per oil change. That's our business. What do you think Jiffy Lube does? They're always pushing.
Think you are going not sell addition services and make a good living doing this. Have fun....
Don't Offer Discounts
They are a waste of time and do not breed success. The thinking is that you offer a customer a discount now, they become your customer, and then they pay full price later.
Does not work with oil change businesses. The same person who uses a coupon for that oil change today is going to find a coupon in three-four months later for another discount maybe even for less. Cheap people stay cheap.
We offered $20 oil changes at Providence Hospital and got five people (not a lot anyway). Months later when those people called and we gave them the regular price they went someplace else. I will never make that mistake again.
The people who will pay $30-$40 per oil change are out there if you want to do the individual. You will not have to get them with discounts. Let those people go to Midas or Sears and get jacked. They are going to think they are getting a cheap oil change when little do they know they will be leaving there with a $350 repair bill.
Today I just picked up a fleet that has six Isuzu Box Trucks. I wish they were all diesel as only one of them is but I guess I can live with that. I set it up to do on a Tuesday because that's when they are not being driven and on a three month interval. I put them into the computer and just go out and do them. I do not even call. The only way they know we were out there is if they see us or the drivers notice a brand new window sticker in the window.
Good mobile oil change business advice is hard to find these days. Its not really a new industry any longer. You have had mobile oil change operators around for the last fifteen years. Most heavy construction equipment dealerships have a mobile service they offer although its very expensive. I have found that the reason why people think mobile oil changes is some "new" service for 2009 is because most operators only last a year. This industry has a 90% failure rate I would say. It may be more.
I was actually talking to one of the managers at one of the busiest quick lubes in town and, wow, did I have an interesting conversation with him. He re-affirmed several things I already knew. We talked for thirty minutes and let me outline some things we talked about that will give you insight in the oil change business. I used to think that we were different but I have come to find out that mobile oil change businesses and fixed oil change businesses are all in the same boat.
Here are two of the many things we talked about.
Add Ons
This is the key to your profits. This is what you take home ladies and gentleman. Oil change pay for the van, building, phone line, insurance, and all the other set overhead you may have but add ons pay YOU.
Without them you will be flailing in the wind. I used to think that we did not need add-ons. We did not have the overhead as Jiffy Lube so we only pushed them if we had to. Nonsense!
You need to push air filters, wiper blades, coolant flushes, radiators flushes, injectors cleaners, and anything else you can think off to get each ticket invoice as high as you can while at the same time being ethical. I firmly believe in God and that you should not sell anything that is false or the customer truly needs. But if the vehicle calls for it or they need it you need to be able to sell it. That's business. If you are doing individuals you need to be able to average one additional service per oil change. That's our business. What do you think Jiffy Lube does? They're always pushing.
Think you are going not sell addition services and make a good living doing this. Have fun....
Don't Offer Discounts
They are a waste of time and do not breed success. The thinking is that you offer a customer a discount now, they become your customer, and then they pay full price later.
Does not work with oil change businesses. The same person who uses a coupon for that oil change today is going to find a coupon in three-four months later for another discount maybe even for less. Cheap people stay cheap.
We offered $20 oil changes at Providence Hospital and got five people (not a lot anyway). Months later when those people called and we gave them the regular price they went someplace else. I will never make that mistake again.
The people who will pay $30-$40 per oil change are out there if you want to do the individual. You will not have to get them with discounts. Let those people go to Midas or Sears and get jacked. They are going to think they are getting a cheap oil change when little do they know they will be leaving there with a $350 repair bill.
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